Corruption in Thailand worsened in the first half of the year, with the private sector saying it must spend 30-35 per cent of a project's budget as graft to win a government job, a survey by the University of the Thai Chamber of Commerce (UTCC) and the Anti-Corruption Network found.

If this is true, corruption could cost Bt252 billion (S$316 billion) to Bt294 billion out of the country's overall investment budget of Bt840.14 billion this year, amounting to 2.18-2.54 per cent of gross domestic product.

Taken from an IMF paper on the affects that corruption has on a countries economy.http://www.imf.org/external/pubs/ft/issues6/index.htmRent and Rent SeekingFor most of us, rent is what we pay the landlord each month or what a rental agency at an airport charges for letting us use a car for a week. For the economist, however, rent is short for "economic rent" and means something quite different. It is the extra amount paid (over what would be paid for the best alternative use) to somebody or for something useful whose supply is limited either by nature or through human ingenuity. For example, Mike Tyson, the boxing champion, has a natural and rare talent for flooring his opponents during the first round and he was paid some $70 million for exercising this talent during 1996. If he were not a talented boxer, Mr. Tyson's alternative employment would likely be somewhat more modest, earning, say, about $30,000 a year. The $69,970,000 difference is an economic rent accruing to Mr. Tyson because nature has seen to it that boxers of his skill are in very short supply. Similarly, for several years during the 1980s the U.S. government restricted the import of Japanese automobiles to a certain quota, creating an artificial shortage of foreign cars. The result? General Motors and other U.S. car manufacturers not only sold more cars but raised their prices, thereby enjoying an economic rent (the difference between the price of domestic cars and the cheaper but unavailable Japanese alternative). Japanese auto manufacturers also enjoyed an economic rent because the demand for their cars in the United States outstripped the artificially low supply.

Not much can be done about natural limitations on supply, for which Mr. Tyson is no doubt grateful, but seeking economic rents by creating artificial limitations is a booming business. Two centuries ago Adam Smith noted that "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public." Every day private firms spend vast amounts of money attempting to convince legislators to grant monopolies or otherwise restrict competition so that some industry or individual can realize a rent. Throughout the world bureaucrats and people in authority are indefatigably maneuvering to position themselves in a tiny monopoly where they can be bribed for issuing a license, approving an expenditure, or allowing a shipment across a border. Studies have shown that these rent-seeking activities exact a heavy economic and social toll. Some rent-seeking activities are perfectly legal. Other rent-seeking activities listed in this paper are distinctly illegal, and it goes without saying that society would be better off without their corrupting influence.

There is an old axiom often applied to those with political ambitions: Power corrupts; absolute power corrupts absolutely. In this case, the term corruption means the abuse of a public office for personal gain or other illegal or immoral benefit. Political corruption is a recognized criminal offense, along with bribery, extortion, and embezzlement – three illegal acts often associated with corruption in office. Some forms of corruption may escape legal notice, such as the hiring of relatives for key positions, but they may not escape the scrutiny of voters on Election Day.

Whenever a person accepts a political appointment or wins election to an office, he or she must take an oath to uphold the public trust. While this may sound noble on paper, enforcement of this oath can prove problematic. Very few political candidates successfully reach office without making a few promises along the way. Many of these campaign promises are harmless, such as sponsoring a bill or lobbying for more funding for schools. Other promises, however, may come closer to crossing an ethical line, such as hiring relatives or awarding government contracts to influential contributors.

Political corruption has been a fact of life for thousands of years, beginning with the first attempts at a democratic form of government in ancient Greece and Rome. Almost all of these countries' political representatives were from the wealthier class, which inevitably led to a division between the influential haves and the virtually powerless have-nots. The seeds of political corruption were planted as soon as the senators and other political leaders realized that power and wealth could be equals. Political corruption often begins with favoritism towards those with wealth and influence.

In the modern sense of the term, political corruption is a cancer on the integrity of a governmental body. Very few public officials begin their careers with the intention of becoming corrupt, but some succumb to a sinister form of peer pressure over time. Being placed in a position of significant political power can be overwhelming, and the temptation to bend or break rules for a perceived 'greater good' is always present.

There are a few experienced politicians, however, for whom political corruption is a natural state of being [unless you live in Thailand]. History is filled with examples of corrupt public officials, such as New York City's Boss Tweed and his political cronies at Tammany Hall during the late 19th century. Charges ranging from bribery and graft to nepotism, racketeering and fraud were all leveled at Tweed's administration, but it was Tweed's skills in political corruption that kept law enforcement at bay for years. A number of judges and law enforcement officers were already on Boss Tweed's secret payroll. Political corruption may always remain a concern for democratic governments, but there are a number of independent checks and balances that can root out corruption before it affects the integrity of the political body as a whole.

Corruption will always be a part of the equation, as long as humans are also a part.The question is how do we reduced it to manageable levels?The economic term of Rent,in it's natural state,is in essence a VAT. A person brings to the table a particular ability that enhances the process and for that charges Rent. In most countries through out history , artificial conditions were created that enable people in power to take advantage of these artificial conditions and charge Rent and that is corruption.We know how to reduce corruption, it has being done, in many countries , many times throughout history, and in every instance it has improved conditions. Simply make it more rewarding for the individual to follow the rules than to not. The process is called the Carrot and stick, and the whipping stick. Introduce rewards of proper compensation for officials so that they would not have to subsidize their income from corruption. And offer rewards to those that play by the rules such as promotions. That would be the carrot and stick side of the solution.And increase the cost of engaging in corruption, by introducing punitive actions that would make corruption less profitable, removing some of the incentive.It is really very simple, all that is lacking is the political will.

sirineou wrote:Corruption will always be a part of the equation, as long as humans are also a part.The question is how do we reduced it to manageable levels?The economic term of Rent,in it's natural state,is in essence a VAT. A person brings to the table a particular ability that enhances the process and for that charges Rent. In most countries through out history , artificial conditions were created that enable people in power to take advantage of these artificial conditions and charge Rent and that is corruption.We know how to reduce corruption, it has being done, in many countries , many times throughout history, and in every instance it has improved conditions. Simply make it more rewarding for the individual to follow the rules than to not. The process is called the Carrot and stick, and the whipping stick. Introduce rewards of proper compensation for officials so that they would not have to subsidize their income from corruption. And offer rewards to those that play by the rules such as promotions. That would be the carrot and stick side of the solution.And increase the cost of engaging in corruption, by introducing punitive actions that would make corruption less profitable, removing some of the incentive.It is really very simple, all that is lacking is the political will.

Or simply reduce their salary to a minimal stipend ... in the mutual knowledge that they will be well remunerated through the process of carrying out the functions they were previously paid to do. That in a stroke would make a very significant positive contribution to any nation's balance of payments.

“Some days I am an optimistic pessimist ... other days I am a pessimistic optimist”

Or simply reduce their salary to a minimal stipend ... in the mutual knowledge that they will be well remunerated through the process of carrying out the functions they were previously paid to do. That in a stroke would make a very significant positive contribution to any nation's balance of payments.

As attractive as this might sound, I am afraid the solution to this problem lays in the opposite direction.Putting aside greed, The cost of living is what the cost of living is, and people will do what they have to do to survive and provide for their families. Politicians in emerging economies don't realize what a drag to their economies corruption is, or if they do they are unable or unwilling to do anything about it.Corruption is like a ball and chain on the leg of any economy disabling it from gaining enough speed to attain critical mass.It would cost any government a lot less to pay it's workers a living wage, than them having to subsidize their income by" Corruption". Low wages reduce productivity, and the accompanied corruption is not taxable income. A loose loose situation.

Yes but the ""coruption" is seen to be part of the job/salary a bit like tips in a restraunt As i am already being set up by the Thai company receiving my good with comments of need license permits ect strange that i was told catergorically by Thai customs excise i did not so a meeting is on the cards the container has not left yet and will not untill i am satisfied i am not handing over a blank cheque to the receivers But I do anticipate some tea money just want damage limitation

my comments may be wrong but never deliberatelyIf it aint broke, dont fix it

geordie wrote:Yes but the ""coruption" is seen to be part of the job/salary a bit like tips in a restraunt As i am already being set up by the Thai company receiving my good with comments of need license permits ect strange that i was told catergorically by Thai customs excise i did not so a meeting is on the cards the container has not left yet and will not untill i am satisfied i am not handing over a blank cheque to the receivers But I do anticipate some tea money just want damage limitation

Hi Geordie.have not seen you here in a while. You must have being busy packing I guess,Any way the place has not being the same with out you. I don't doubt some tea money have to change hands, That's the way it has being in Thailand and I suspect that's the way it will be for a while.From my point of view, I am not sure if it is a bad thing. Those who have money talk , and since I have a little bit, I guess it is a goo thing foe me..But IMO if Thailand wants to take the next step in the world economic stage, they need to do something about the corruption that is so pervasive throughout their system. One thing that Business does not like is Uncertainty.And it is this Corruption fueled uncertainty, that is keeping a lot of investment out.

I guess it depends as said, if you have the money, it's not a problem. The alternative as in Western countries, is endless Red tape ,bloated bureaucracies giving you the run around unless you know the right people. In Thailand the corruption is SO negotiable , I love it.!

Or simply reduce their salary to a minimal stipend ... in the mutual knowledge that they will be well remunerated through the process of carrying out the functions they were previously paid to do. That in a stroke would make a very significant positive contribution to any nation's balance of payments.

As attractive as this might sound, I am afraid the solution to this problem lays in the opposite direction.Putting aside greed, The cost of living is what the cost of living is, and people will do what they have to do to survive and provide for their families. Politicians in emerging economies don't realize what a drag to their economies corruption is, or if they do they are unable or unwilling to do anything about it.Corruption is like a ball and chain on the leg of any economy disabling it from gaining enough speed to attain critical mass.It would cost any government a lot less to pay it's workers a living wage, than them having to subsidize their income by" Corruption". Low wages reduce productivity, and the accompanied corruption is not taxable income. A loose loose situation.

Never be afraid of stating your view sirineou .... even if I disagree with it

In the West, where they get paid far more than a living wage, corruption is still a problem ... too many chose this line of 'work' due to the 'benefits' ... it's nothing to do with survival ... it's called GREED; unless survival these days is living in a bigger house than you need, with a new Jaguar on the drive and sending your kids to a fancy school; maybe that is the new survival for such people. The corruption structure has been around a while and will continue to be no matter how those with the opportunity get paid. Public employees at the bottom end of the scale here .. Pu Yai Bann .. Tessaban employees et al ... recently received a 100% increase in their official remuneration and I haven't heard any reports of the need for 'tea money' disappearing or even declining overnight.

And the whole point is it wouldn't help the government a great deal because it's the general public/business that pays for the corruption ..... if companies didn't have to pay the government employees 'silver tea set' money do you think they would charge less for the job? No they would collectively just make more profit.

Yes if they paid higher wages the government could claw back a little of the increase in salary back in tax but lower income employees pay little tax here. Corruption, as you say, is like an extra tax revenue that is placed upon the people but does not go into the Public Purse. There is no solution as it's too entrenched.

[posted between recurring dropouts as my ISP probably wastes too much of our subscriptions on corruption and not enough on infrastructure]

“Some days I am an optimistic pessimist ... other days I am a pessimistic optimist”

Never be afraid of stating your view sirineou .... even if I disagree with it

No fear involved, just being polite

In the West, where they get paid far more than a living wage, corruption is still a problem .

-I never said eliminate corruption, I said reduce it .and No one will argue that corruption is less pervasive in the west as it is in Thailand, In fact I think the OP is about the large degree of corruption in Thailand. In this one I think you are arguing with your self

recently received a 100% increase in their official remuneration and I haven't heard any reports of the need for 'tea money' disappearing or even declining overnight.

-No one will argue that an underpaid worker is more likely to engage in corruption to subsidize his/hers income. But paying them more is only one part of the solution there other parts, such as punitive actions, and rewards for playing by the rules.One with out the others will not work.

And the whole point is it wouldn't help the government a great deal because it's the general public/business that pays for the corruption .....

It would help the government in many different ways.One would be increased revenue from tax collected on the increase of salaries, as far as I know income from corruption is not reported . Two would be increased revenues from the Tax collected on the increase of foreign investment that a better working environment will foster. If I go on a forum now, and write I come to Thailand and I want to invest in a business, 90% of the replies will be "don't do it,corruption will kill you",so I am sure corruption has a negative affect on investment.

sirineou wrote: No one will argue that corruption is less pervasive in the west as it is in Thailand

It's certainly not as overt ... in which case one might say more deceitful .... and generally practiced more by those higher up the tree. Paying huge bonuses to company bosses who have in fact done a poor job and possibly caused the company to lose considerable sums of money ... rife in financial institutions ... just because they were clever enough to get their lawyer to draw up a cunningly-worded contract, is one of the more blatant aspects of corruption in the West and in financial terms may amount to all the corruption in Thailand combined. These same fat cats are probably ensuring that those at a lower level caught stealing a few paper clips are severally disciplined or even fired ... "setting an example, as we don't want such corrupt employees in our company".

sirineou wrote:No one will argue that an underpaid worker is more likely to engage in corruption to subsidize his/hers income.

Nor, in this country at least, would they argue that paying them a decent salary will necessarily encourage them to stop. It's been the way they do things for generations and will take generations to change. Like anything someone has to take the first step ... but if they are also corrupt they might be disinclined to cut off their nose to spite their face.

sirineou wrote: In fact I think the OP is about the large degree of corruption in Thailand. In this one I think you are arguing with your self

I often 'argue' with myself ... it's known as evaluative thinking.

Anyway ... good to discuss these matters even if we can have little influence on them ... other than finding as many ways not to be affected by them as possible.

“Some days I am an optimistic pessimist ... other days I am a pessimistic optimist”